Gaming groups ask Congress to ban sports prediction markets in the CLARITY Act

Several national gaming, tribal, and labor organizations are pushing the US Senate to add language to the Digital Asset Market Clarity (CLARITY) Act that would explicitly bar event contracts tied to sports and casino-style gaming. For high-risk payments players, the important bit is simple: this is another attempt to draw a hard line between regulated sports betting and prediction market platforms.

1. According to a Wednesday Semafor report, groups tied to sports betting — including the Indian Gaming Association and the American Gaming Association — have united against what they described as gambling on prediction markets. They want Congress to make clear that “sports betting falls outside the [Commodity Futures Trading Commission’s] remit and cannot be offered through prediction market platforms.”
2. In their letter, the groups said: “While our organizations may differ on other issues, including gambling policy, we are united in our concern that prediction markets have fueled the largest expansion of gambling in US history over the past 18 months — without voter approval or legislative authorization.”
3. The pushback comes as the Commodity Futures Trading Commission (CFTC), under Chair Michael Selig, has claimed “exclusive jurisdiction” over prediction markets. Selig has backed platforms like Kalshi and Polymarket in their fights with state-level gaming authorities, which is why the regulatory boundary here matters: if the CFTC holds the line, the state-by-state gaming model gets weaker; if states win, prediction markets on sports get a much tighter perimeter.
4. The American Gaming Association said that as of Wednesday, state gaming authorities had lost about $1.08 billion in tax dollars “since prediction markets began offering sports event contracts.” The groups also argued that the CFTC “was created to oversee commodities and derivatives markets, not gambling and not sports wagering,” and said it lacks “the expertise and the infrastructure to police nationwide sports betting.”
5. The CLARITY Act is designed to transfer some authority over digital assets from the Securities and Exchange Commission (SEC) to the CFTC. Some lawmakers expect it to pass out of Congress by August. The bill passed the House of Representatives in July 2025, but has been delayed by disputes over stablecoin yield, ethics, and tokenized equities. One more wrinkle: some experts and industry advocates think the fight over prediction markets could end up in the US Supreme Court, which in 2018’s Murphy v. National Collegiate Athletic Association gave individual states the authority to regulate sports gambling.

For PSPs, acquirers, and banks serving gaming or prediction-market merchants, the practical question is jurisdiction. The same product can look like a regulated financial contract to the CFTC and like sports wagering to state gaming authorities, and that classification will determine who can process it, where, and under what compliance stack.